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President Donald Trump's longtime attorney Michael Cohen alleged Trump falsified documents to improve his chances at obtaining a loan during his failed attempt to buy the Buffalo Bills in 2014. What are the legal consequences of these allegations for the president?

Michael Cohen’s testimony on Monday before the U.S. House of Representatives contained many allegations against President Donald Trump, a number of which claimed that Trump engaged in unlawful acts. One such allegation connects to the most recent sale of the Buffalo Bills and stems from Trump’s longtime interest in becoming an NFL owner.

Here is the relevant testimony from Cohen, who served as Trump’s attorney from 2006 to 2018:

I’m giving the Committee today three years of President Trump’s financial statements, from 2011-2013, which he gave to Deutsche Bank to inquire about a loan to buy the Buffalo Bills and to Forbes . . . It was my experience that Mr. Trump inflated his total assets when it served his purposes, such as trying to be listed among the wealthiest people in Forbes, and deflated his assets to reduce his real estate taxes.

To supplement his testimony, Cohen provided the House Committee on Oversight and Reform with documents purporting to be Trump’s financial statements from 2011 to 2013. The documents, Cohen testified, were submitted by Trump to Deutsche Bank in order to increase the odds that the bank would loan him the requisite finances to buy the Buffalo Bills. Those documents represent that Trump experienced an increase in net worth from $4.56 billion in 2012 to $8.66 billion in 2013. Most of this increase reflected the addition of purported “brand value,” totaling $4 billion. The term “brand value,” as it relates to Trump’s net worth, is apparently not defined in the documents. However, it presumably referred to the Trump brand that is linked to hotels, golf courses, television shows and other properties by the Trump Organization. It’s not clear why brand value was not claimed by Trump in prior years or why it amounted to $4 billion in 2013.

Cohen contends that Trump submitted falsified financial documents, with exaggerated claims of wealth and inflated property values, to Deutsche Bank. Trump’s relationship with this bank is well-documented. According to a 2018 article by Adam Liptak and Maggie Haberman of The New York Times, Deutsche Bank has loaned Trump “well over” $1 billion for various projects. It’s unclear whether, and to what extent, the bank pledged support to Trump in his bid to buy the Bills. It is clear, however, that Trump submitted a bid for the Bills and that the bid was rejected. This means that any approved loan by Deutsche Bank to finance the team’s purchase was never put into action.

The sale of the Bills and Trump’s attempts to buy the Bills and the Patriots

The Bills became available for sale in the spring of 2014 after longtime owner Ralph Wilson, who had purchased the Bills for $25,000 in 1959, passed away at the age of 95. Wilson’s death meant that his estate took control of the team. The estate then hired Morgan Stanley to sell the franchise and maximize its value.

A number of wealthy individuals explored the potential purchase of the Bills and met with banking institutions to assess how to best construct a bid. Trump was one such person. Buffalo Sabers owners Terry Pegula and Kim Pegula, and a group of investors led by musician Jon Bon Jovi, were others.

Trump, the Pegulas and the Bon Jovi group submitted bids and were the three finalists. The Pegulas won the bidding in September 2014 by having offered a then-NFL record $1.4 billion. Trump’s offer was reportedly under $900 million. The NFL’s finance committee and then the league’s owners unanimously approved the Pegulas as the new owners of the Bills. Trump, for his part, tweeted a back-handed congratulations: “The people of Buffalo should be happy Terry Pegula got the team but I hope he does better w/the Bills than he has w/the Sabres. Good luck!”

This was not Trump’s first attempt to buy an NFL team. In February 1988, Trump negotiated a potential purchase of the New England Patriots with then-owner Billy Sullivan. At the time, Sullivan faced significant financial troubles stemming from a loss of $30 million connected to his family’s financing of the Jacksons’ “Victory Tour.” The Patriots stadium, Foxboro Stadium, had fallen into bankruptcy and was purchased by local businessman Robert Kraft. Meanwhile, Sullivan tried to sell the team to several bidders, one of whom was Trump. Trump withdrew from negotiations, however, after he learned that then-NFL commissioner Pete Rozelle opposed him. Rozelle didn’t want Trump, who had led a lawsuit brought by the USFL against the NFL, to join the exclusive club of NFL owners.

According to the sources, Rozelle didn't want Trump in the league because of his casino holdings in Atlantic City and because of his role in the antitrust suit the USFL filed two years ago against the NFL. Trump, who then owned the USFL's New Jersey Generals, clashed repeatedly with Rozelle in court. (The NFL was declared a monopoly in the case but was forced to pay only $3 in damages. The case is under appeal.)

For his part, Trump explained his withdrawal as him realizing that the NFL was trying to eliminate him as a rival: "I feel the enthusiasm for selling the New England Patriots to me is an attempt by the NFL to co-opt me and get rid of Donald Trump as a problem.”

Cohen describes criminal conduct by Trump in attempting to buy the Bills

Cohen’s testimony portrays Trump as falsifying documents in order to improve his odds at obtaining a loan. If this claim were true, it could describe several types of crimes.

One such crime is contemplated by federal statute 18 U.S.C. § 1014. This statute makes it a federal offense to knowingly lie on a loan application when the loan is backed by federal financing. Persons convicted of this crime can face up to 30 years in prison and a $1 million fine.

Bank fraud is also an applicable offense. Federal statute 18 U.S.C. § 1014 outlaws knowingly defrauding, or knowingly attempting to defraud, a financial institution through false pretenses and representations. Persons convicted of bank fraud can face up to 30 years in prison and $1 million fine. Paul Manafort, who served as Trump’s campaign chairperson in 2016, was convicted of bank fraud last April.

Wire fraud is yet another plausible charge. It makes it a crime to knowingly defraud another through false or misleading transactions. As a federal charge, wire fraud can lead to 30 years in prison and a $1 million fine. New York also has criminal laws that outlaw lying on financial documents, bank fraud, wire fraud and similar crimes.

Legal defenses and practical challenges

For several reasons, Trump’s attempt to buy the Bills five years ago will probably not have significant legal consequences.

First, it’s worth acknowledging that Cohen is neither a neutral narrator of past events nor is he necessarily credible. Cohen has become a fierce critic of Trump, who in turn has lambasted his former lawyer as a liar. Cohen’s believability, particularly when speaking to Congress, also invites skepticism. Last November he pleaded guilty to lying to Congress, along with other charges. If Cohen lied to Congress before, it’s possible he could be doing so again. His depiction of Trump’s attempt to buy the Bills and the documents he provided should be carefully dissected.

Second, it’s not certain that Trump knowingly lied on the loan application. The inclusion of $4 billion in brand value certainly invites questioning. However, it was a line of questioning that Deutsche Bank presumably conducted when it evaluated the application. Deutsche Bank is a sophisticated business actor with skilled and seasoned persons who review loan applications—particularly those seeking hundreds of millions of dollars. The bank undoubtedly took steps to evaluate Trump’s assurances and characterizations before lending him money.

Along those lines, if Deutsche Bank decided to loan to Trump after conducting its due diligence, the bank apparently felt comfortable with the loan. This is a bank that, as reported by The New York Times, made a number of loans to Trump and thus apparently found him reliable. Some have speculated that Deutsche Bank was nefariously willing to loan money to Trump because of Trump’s close business relationship with Deutsche Bank executive Justin Kennedy, the son of the recently-retired U.S. Supreme Court Justice Anthony Kennedy, but independent fact-finders have debunked that theory.

Third, there is an ongoing legal debate about whether, and under which circumstances, a sitting president can be charged with a crime. The Constitution is silent on this topic. It only addresses removal of office through impeachment by the U.S. House of Representatives and conviction by the U.S. Senate (while Presidents Andrew Johnson and Bill Clinton were impeached, no president has ever been impeached and convicted). Legal scholars have offered very divergent perspectives on whether criminal charges could be brought against a sitting president. The U.S. Justice Department asserts that an indictment against a sitting president would violate the Constitution, but the U.S. Supreme Court has not enunciated that position. Although not a criminal matter, the U.S. Supreme Court held in Bill Clinton v. Paula Jones that a President can be sued civilly for matters that took place prior to him or her taking office. That precedent, however, does not also establish that a president could be criminally charged for offenses that took place prior to him or her taking office.

Fourth, as a pragmatic matter, it’s not clear which circumstances would lead to a federal indictment against Trump over his failed bid to buy the Bills. Deutsche Bank, which possesses the relevant loan records and has information concerning how those records were evaluated, would not have an obvious business interest in facilitating a criminal case being brought against the sitting president. If anything, the bank, which did not finance Trump buying the Bills since the team was sold instead to the Pegulas, would presumably oppose such an effort. Similarly, the NFL and its owners—who Colin Kaepernick believed were intimidated by Trump—are not inclined to aid in the building of a prosecution against a sitting president. The same is true of Wilson’s estate or its successors. While law enforcement and prosecutors could seek to subpoena business records and obtain witness statements related to Trump’s dealings with Deutsche Bank (perhaps they already have), it remains to be seen if any such efforts lead to charges related to Trump’s interest in buying the Bills.

It is theoretically possible that Trump could still face charges related to his attempt to buy the Bills after he leaves office—depending on when that happens. The federal statutes that prohibit lying on a loan application, bank fraud and wire fraud (when it affects a financial institution) have 10-year statutes of limitation. As a result, Trump could face charges related to his attempted purchase of the Bills until 2024. However, “could” should not be confused with “will.” Much would depend on whether the loan application actually broke the law, whether a sitting president could be charged and whether Trump is re-elected in 2020. If Trump is re-elected, he’ll be president until January 2025; if he is defeated, his term would end in January 2021.